LA and Long Beach to subsidize ships to switch to low sulfur fuels

The Los Angeles and Long Beach Boards of Harbor Commissioners have voted to approve a voluntary incentive program that will see ports offset the cost difference between currently used bunker fuel and low-sulfur distillate fuel for vessels that switch fuel at least 20 miles--and as far as 40 miles--from the ports.

The ports will earmark millions of dollars to pay vessel operators to use cleaner-burning, low-sulfur fuel in their main propulsion engines. Sulfur oxides will be cut by as much as 11 percent and particulate matter by 9 percent, accelerating air-quality improvements ahead of an already aggressive schedule set by the San Pedro Bay Ports Clean Air Action Plan.

Vessels will also be required to use low sulfur fuel in their auxiliary engines while at berth in the port complex. To qualify for the incentive program, the ships must also participate in the ports' voluntary Vessel Speed Reduction Program, limiting speeds to 12 knots during the switch to low-sulfur fuel. Most ships already participate in the speed reduction program, which also curbs emissions.

The incentive program is expected to cost the Port of Los Angeles as much as $8.6 million and the Port of Long Beach as much as $9.9 million annually.

The Pacific Merchant Shipping Association (PMSA) applauded the decision today to approve the incentive program, which was introduced by PMSA to reduce emissions at the two Southern California ports.

"This program represents another important step in a continuing process toward improving the air quality of Southern California," said John McLaurin, President of PMSA. "Further, PMSA and its members commend the Harbor Commissioners and Mayors for their actions in partnering with us in this unique and mutually beneficial proposal. We hope that this incentive-based approach serves as a model for future endeavors toward this goal of overall emission reductions."

The one-year incentive proposal is scheduled to start July 1 and expire June 30, 2009, unless extended by the two commissions.

On July 1, 2009, a pending California Air Resources Board regulation would require the use of low-sulfur fuel in cargo vessels' main propulsion engines within 24 nautical miles of the state's coast. The ports' Clean Air Action Plan also calls for the ports to accelerate ship emission reductions by including lease-based limits on sulfur content in fuel. This is still planned. The incentive program is aimed at reducing more emissions on an even faster schedule.

"Bunker fuel is a major source of port-related air pollution, and this program has the potential to dramatically cut the use of bunker fuel in a hurry," says Long Beach Harbor Commission President Mario Cordero. "Most shipping lines will be able to start participating immediately."

"This is another example of how the two ports can and must work together to achieve dramatic results," said Los Angeles Harbor Commission President S. David Freeman. "And we'll continue to work together to implement these landmark clean air initiatives."

"This program is the direct result of a partnership between the ports and industry to reduce ship emissions," said PMSA's McLaurin. "The bunker fuel replacement initiative builds upon other successful voluntary emissions reduction programs around the ports including the vessel speed reduction program which has demonstrated a 90% compliance rate."